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Author: 


Leiserson,  William  M. 


Title: 


Employment 
management,  employee 

Place: 

Washington,  D.C. 


Date 


1919 


qu^<^iQqq^M 


MASTER    NEGATIVE   # 


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U*S«   Working  oonditions  servioe* 

Eiaploynent  znanagonentf  employee  representation 
and  industrial  demooraoyi  address  delivered  be- 
fore the  National  association  of  en^loyment 
managers,  Cleveland,  May  23,  1919*   Washington, 
Govt,  print,  off.,  l919« 

15  p«   25^m« 

At  head  of  titlet  U.S.  Department  of  labor. 
By  W«M.  Leiserson. 


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U.  S.  DEPARTMENT  OF  LABOR 

WORKING  CONDITIONS  SERVICE 

GRANT  HAMILTON.  Dimrtor  General 


EMPLOYMENT  MANAGEMENT 
EMPLOYEE  REPRESENTATION 
and  INDUSTRIAL  DEMOCRACY 


Address  delivered  before  the 

National  Association  of  Employment  Managers 
Cleveland,  May  23, 1919 


SCHOOL  OF  EUSm 


WASHINGTON 

GOVERNMENT  PRINTING  OFFICE 

1919 


Columbia  Winitavaity 

in  tfie  Cttp  of  j0etD  f^orfc 

LIBRARY 


School  of  Business 


\ 


SCHOOL  OF  BUSINESS 
COLUMBIA  UNIVERSITY 


U.  S.  DEPARTMENT  OF  LABOR 

WORKING  CONDITIONS  SERVICE 

GRANT  HAMILTON.  Director  General 


/ 


EMPLOYMENT  MANAGEMENT 
EMPLOYEE  REPRESENTATION 
and  INDUSTRLVL  DEMOCRACY 


Address  delivered  before  the 

National  Association  of  Employment  Managers 

Cleveland,  May  23,  1919 


WASHINGTON 

GOVERNMENT  PRINTING  OFFICE 

1919 


no 


J) 


I 


\J(  n  3  ^ 


PREFATORY. 


To  get  at  the  heart  of  things  is  the  underlying  motive  for  all 
the  activities  of  the  Working  Conditions  Service.  It  is  not 
diflicult  to  wTite  the  pleasant  and  agreeable,  but  no  constructive 
work  can  be  accomplished  without  analyzing  all  the  elements 
which  enter  into  or  hifluence  a  given  problem  and  thus  scientifi- 
cally reaching  an  interpretation  which  will  contribute  to  its 

solution. 

Information  as  to  shop  committees,  employee-representation 
schemes,  and  all  similar  devices  coming  from  all  quarters  of 
industry,  indicates  a  hick  of  precision  m  analysis  which  the 
importance  of  the  subject  demands. 

The  adthess  delivered  by  Dr.  Leiserson  reviews  and  analyzes 
the  relationships  which  arc  being  attempted  and  draws  definite 
conclusions  based  upon  experience  and  knowledge  of  human 

predik'Ctions. 

Every  year,  every  day,  and  every  hour  brings  its  change  in 
industry,  but  over  and  above  all,  the  same  fundamental  truths 
of  life  and  relationships  are  clearly  and  definitely  marked. 

The  function  of  the  Working  Conditions  Service  is  the  collec- 
tion, analysis,  and  dissemination  of  facts,  together  with  their 
natural  and  accurate  interpretation.  This  approach  and 
process  makes  available  to  industry  that  knowledge  so  essential 
in  comprehensively  dealing  with  both  the  human  and  material 
sides  of  industrial  life  and  activity. 


^^.j^^^X^^i^^^^v 


Director  General. 


121873"'— 19 


I  X 


EMPLOYMENT    MANAGEMENT,    EMPLOYEE    REPRESENTA- 
TION, AND   INDUSTRIAL  DEMOCRACY. 

Bv  W  M.  LEISERSON,  Chief,  Division  of  labor  Administration,  Working  Condi- 
'      ■      ■  tions  Service. 


Germany  says  to  the  Allies,  '^f  you  don't  give  us  the  knid  of 
peace  that*^we  want  we  will  turn  our  country  over  to  the  Bolsheviks.' 
An  American  can't  help  wondering  what  good  that  will  do  Germany 
Is  Bolshevism  less  dangerous  than  the  peace  treaty  ?  The  board  of 
directors  of  the  Employment  Managers'  Association  writes  to  me, 
'^You  arc  too  dangerous  a  man  to  speak  on  'Organized  Labor/ 
the  subject  we  assigned  to  you  at  first.  Will  you  please  talk  on 
*  Organizing  the  Working  Force'  instead?"  I  can't  help  wondering 
why  the  latter  subject  is  less  dangerous  for  me  to  discuss  than  the 
first  But  then,  everything  is  in  the  point  of  view.  A  sailor  finds 
living  on  land  too  dangerous  and  does  not  feel  himself  safe  untd  he 
is  on  a  vessel  deck  in  mid-ocean. 

(Let  me  digress  for  a  moment  to  say  tliat  the  organic  act  creating 
the  Department  of  Labor  provides  that  'the  purpose  of  the  Depart- 
ment of  Labor  shaU  be  to  foster,  promote,  and  develop  the  welfare 
of  the  wage  earners  of  the  United  States,  to  improve  their  working 
conditions^'  etc.  This  broad  and  basic  law  includes  within  its 
scope  all  those  employed  in  gainful  occupations,  union  and  non- 
union ahke.)  .     j   •  * 

Industrial  democracy  means  representation  of  organized  mter- 
ests.-Whether  we  call  it  ''Organized  Labor"  or  "An  Organized 
Working  Force,"  the  subject  we  are  to  discuss  is  democracy  in 
industry;  and,  as  Prof.  Commons  says  in  his  recently  pubhshed 
book  on  'industrial  Goodwill"— 

Roprescntutive  democracv  in  industn^  is  representation  of  organized  interests. 
Individuals  whr)  are  not  organized  can  not  dKK)se  representatives.  They  must  bo 
content  with  their  tacit  proxies  given  to  the  organized.  When  once  organized  they 
can  be  consulted  in  advance  of  action.    Tlie  procedure  of  autocracy  is  to  act  first 

and  consult  aften^ards    *    *    *  ,        .  .  rr    *   i 

But  democracy  can  not  ((uickly  consult  all  individuals  whose  interests  are  affected. 
It  comes  BH  near  as  p,>8sible  to  doing  tliis  when  it  consults  those  who  have  been  freely 
chosen  for  the  purpose  without  interference  from  other  classes,  so  that  they  really 
represent  the  interests  of  the  class  affected.' 

AU  emp  oyees'  organizations  not  examples  of  democracy.— The 
mistake  wc  are  Ukely  to  make  in  dealing  with  this  problem  is  to 

iTTu.  Commons:  "Industrial  CioodwUl,"  McGraw-Hill  Book  Co.,  p.  40. 


Ill 


6         MANACiEMENT,  REPRESENTATION,  AND  INDUSTRIAL  nEMOrRA(.Y. 

assume  that  bo.m.so  i„,|„.st.inl  .lemorrncy  ..orossarily  inv..lvos  an 

orga,n.o.l  la  ,or  ion-o  capablo  of  acting  as  a  unit  throu.^I.  i,      ...rc- 

on  .U.vos,  ih,..of..,o  ovory  organization  of  working  ,,..o,.l..         ,    us 

tnal  plants  ,s  an  cxampJe  of  industrial  dcmocTacy;  C„„Li    o^  1^ 

uutust,,,,  of  ,I„s  ,ou„try  an<l  omployniont  managers  as  „oll  ,u, 
employers  are  assummg  that  aU  these  organisations.;,,  n,atler  whl^ 
then  forn,  or  purpose,  are  providing  industrial  .lemocraey     ,        ei 

As  a  matter  of  fa.t,  however,  a  st.uly  of  the  emplovees'  orgnni.-i- 

ons  now  m  existence  will  .show  that  thev  classify  tlu-msoles    n  o 

tW  general  groups,  and  the  element  of  democracy  is     .7  >re      " 

m  one  of  them,  nor  ,s  it  present  in  each  of  the  other  Vwo  to  tl!c  lal^o 

Welfare   or   shop   committees. -The   fii^st  group   of   emolovce  ■ 
organization  plans^may  he  called  welfare  commit  tes  or  T^^Z 
mitees  proper      These  are  merely  advisory  organization     of  X 
working  force  selected  by  either  the  management  or  the  e  npl  ,v«^ 
for  the  purpose  of  conferring  with  the  foreman,  with  safety  di'r,: 
«^  personnel  and  service  managers  regarding  problems  rela  el  t^ 
work.ng  coiuhtions  in  the  plants.     The  matte's  with  whicrihe  e 
committees  are  concerned  arc  primarily  safety  an.l   wel  are        rk 
witii  a  small  number  trying  to  extend  their  activitie    ,     Lc    ,  ^ 
giievances.     A  though   these  committees  arc  cc^stl  t^y     a 
examples  of  mdustrial  .lemocracy,.  they  involve  no  clement        ".L" 
Uve  bargaining  or  joint  control  over  terms  and  condit  ons  Z,   "n 
ployment.     Complete  authority  is  centered  in  the  managemen     tl 
committees  merely  giving  advice  and  suggestions  mTZ' 
may  not  be  a.-cepted  by  the  management.'^^Tl  e  "we"     uSon" 
an,l  methods  of  operation  of  these  committees  idSy-'t  .em  ^  h 
the  service  work  of  the  plants  rather  than  with  problems  of  ba  -I 
mg,  of  wages,  hours,  aiul  shop  disciphnc,  which    as  I  luT 
presently   arc  the  subjects  that  must 'be  handi:!!  '«    1    „",;:;;; 

cri:f::^Su:;r'"'"^"'"" '""  "'""'"'^ "  '--"^  "™--^ 

Employers'  unions.-Thc  second  group  of  organizations  mav  bo 
calle.1    -employers'  unions."     I„  this  group  arc  inchuM  a    Thot 

Co.  plan,  n,  recognize  the  right  of  wage  earnci^  to  bargain  coUec 
lively  will  their  cmployei^  *  *  *;-  or  which  by  Clic  "  m 
recognize  tlu-  principle  of  coUcctive  bargaining  between  fhe  emn  "  2 
and  , her  employei.,  a.  do  the  plan.s  of  tire  Bethleh  1  g ^^7 
.  c  International  Har^x-stcr  Co.,  an<l  the  Colorado  Fuel  &  on  S' 
he  cmployci.'  organizations  in  this  group  represent  a  long  J  cp  in' 
the  cUiection  of  industrial  democracy,  for  they  involve  geftit'  ,^ 


MAITAGEMENT,  KKPRESENTATION,  AND  INDUSTRIAL  DEMOCRACY.         7 

consent  of  the  employees  who  arc  the  governed  in  industry,  in  the 
making  of  industrial  laws.  You  remomhor  that  our  Declaration  of 
Independence  says  that  government  derives  its  just  powers  from 
the  consent  of  the  governed.  As  political  democracy  provides  for 
the  consent  of  the  governed  in  the  State,  so  industrial  democracy 
will  provide  for  the  consent  of  the  governed  in  industry.  The  differ- 
ence between  these  ''employers'  unions''  and  the  onhnary  unions 
knowTi  as  "organized  labor"  is  that  the  former  are  initiated  by  the 
employers;  they  are  confined  to  one  company  rather  than  connected 
with  a  national  organization  of  employees,  and  the  management  is 
not  excluded  from  the  meetings. 

Trade-unions.— The  third  group  of  organized  workers  are  the 
ordinary  labor  unions,  and  they  usually  involve  wi-itten  or  under- 
stood agreements  between  national  unions  of  the  employees  and 
individual  firms  or  associations  of  employers.  The  a^'reements 
invariably  cover  wages  and  hours  and  usually  working  conditions 
as  well. 

Danger  of  misconceptions  of  employees*  representation.— However 
much  the  employer  whose  workers  are  included  in  the  third  group 
may  object  to  the  principle  of  collective  ])argahiing,  he  understands 
thoroughly  that  his  agreement  with  the  union  involves  that  principle. 
In  the  second  group,  however,  in  the  plans  we  have  called  "employers' 
unions,"  there  is  not  always  this  clear  understanding  on  the  part  of 
the  employer  of  what  his  employees'  organization  involves.  Where 
the  principle  of  collective  bargaining  is  present  only  by  implication, 
as  is  true  in  practically  all  the  plans  except  that  of  the  Midvale 
Steel  Co.,  it  quite  often  happens  that  the  employer  does  not  realize 
that  his  plan  involves  this  principle.  The  employees,  however 
usually  assume  it  does  not  mean  anything  unless  it  gives  them  the 
opportunity  to  bargain  collectively  with  their  employers.  It  is 
hardly  necessary  for  me  to  point  out  to  a  group  of  emplo3Tnent 
managers  that  any  misunderstanding  like  this  of  the  purposes  of  a 
plan  of  employee  representation  is  hkely  to  cause  trouble  between 
employer  and  employee,  making  the  employees  feel  that  they  have 
been  deluded,  while  the  employers  are  likely  to  think  that  the  workers 
are  ungrateful  for  all  the  things  the  management  has  been  trying 
to  do  for  them. 

Collective  bargaining  basis  of  industrial  democracy.— In  spite  of 
the  danger  in  misunderstandings  of  this  kind  a  deluge  of  shop  com- 
mittees and  employee-representation  plans  is  flooding  the  country. 
Employers,  feeling  unrest  and  distrust  among  their  employees,  are 
seizing  on  these  plans  as  a  soTt  of  panacea  for  all  their  labor  troubles 
without  clearly  anal3'zing  their  troubles  and  the  nature  of  the  reme- 
dies. Employment  managers— and  labor  experts  also,  I  am  sorry 
to  say— are  zealously  advocating  representative  committees  as  if  the 


8  MANA<JEMENT,  REPRESENTATION,  AND  INDUSTRIAL.  DEMOCBACT. 


mere  organization  of  tlw^e  would  of  itself  solve  any  labor  problem. 
A  greAt  many  of  our  labor  difTiculties  are  caused  by  ptwr  labor  man- 
agement. Democratic  organizations  of  employees  will  not  removt! 
these.  Only  good  management  will  help  in  such  cases.  Employees' 
organizations  are  needed  to  deal  with  labor  troid>les  that  arise  under 
the  l>est  management,  tliat  grow  out  of  the  democratic  movement 
in  industry. 

Diagnosing  the  labor  problem. — Bt^fore  attempting  to  deal  with 
organizations  of  his  employees  the  employer  ought  to  have  a  thorough 
understanding  of  the  labor  (juestion.  He  must  analj^ze  the  relations 
between  his  own  management  and  his  working  force,  and  he  must 
have  complete  knowledge  of  the  labor  administration  machiTiery  al- 
ready existing  in  his  plant,  which  labor  relations  this  machinery  is 
designed  to  handle  and  which  it  is  not  equipjHMl  to  handle.  This  is 
the  diagnosis  part  of  the  job  and,  unfortunately,  diagnosing  the  indus- 
trial ills  in  a  plant  is  usually  neglected  by  both  emi)loyers  and  lalwr 
experts.  Remedies  are  applied  because  of  their  supposed  general 
healing  powers,  and  just  now  sho])  committ^^es  seem  to  be  the  most 
popular  of  these  patent  medicines.  You  may  have  heard  of  the 
country  doctor  who,  when  he  did  not  know  how  to  diagnose  a  case, 
gave  his  patients  a  concoction  to  throw  them  into  fits.  And  he  liad 
a  good  remedy  for  fits.  We  nmst  avoid  thinking  that  all  labor 
troubles  arc  just  fits  that  can  be  cured  by  one  remedy  like  com- 
mittees. 

Two  kinds  of  labor  relations. — Let  us,  therefore,  try  to  analyze 
the  relations  between  employers  and  employees,  and  sec  if  we  can 
find  out  the  nature  of  various  kinds  of  industrial  ills  and  which  of 
these  can  be  removed  by  organizing  the  working  force.  In  any  plan 
or  policy  of  labor  management  for  industrial  enterprises  two  sets  of 
labor  relations  must  be  clearly  distinguished.  First,  the  personal  re- 
lations which  present  the  personnel  management  problems;  and, 
secondly ,  the  economic  collective  relations  which  cover  the  problems 
of  bargaining  and  democracy.  The  names  I  have  given  to  these  are 
not  very  apt,  but  the  dilTerent  kinds  of  relations  exist  and  must  bo 
dealt  with  in  different  ways.  Perhaps  wo  can  get  the  distinction 
more  clearly  if  we  describe  in  more  detail  the  two  sets  of  labor  rela- 
tions. 

Personal  relations. — What  I  have  called  the  personal  relations 
presents  the  problem  of  managing  human  beings  in  industry.  It 
means  handling  the  human  element  that  goes  into  production  with 
the  same  understanding  of  the  feelings,  instincts,  prejudices,  and 
characteristics  of  the  workers  as  the  management  has  of  the  materials 
and  mechanical  forces  which  it  uses.  The  personal  relations  in  in- 
dustry cover  such  questions  as  hiring,  selection,  placement,  training, 
promotion,  treatment  by  foremen,  health,  safety,  recreation,  lunches, 


MANAGEMENT,  BEPKESENTATION,  AND  INDUSTRIAL  DEMOCRACY.  9 

rest  periods,  etc.  These  questions,  as  we  shall  see  presently  are  not 
essentially  controversial  in  nature;  they  do  not  involve  conflicting 
interests  and  they  have  to  be  settled  by  good  management  and 
scientific  experts  ratlM>r  than  by  democratic  decisions  of  majorities. 

Economic  relations. — The  second  set  of  labor  relations,  those  which 
I  have  called  the  (>conomic  or  collective  relations,  presents  quite  a 
different  problem.  It  has  to  do  with  the  division  of  iho  ])roduct  of 
industry,  with  the  government  or  control  of  industry,  with  bargaining, 
wages,  hours,  unionism,  and  shop  discipline.  The  return  that  work- 
ers should  get  for  their  labor,  the  numl>er  of  hours  they  shall  work 
for  what  they  get,  the  authority  they  sh*ll  have  in  fixing  terms  and 
conditions  of  employment,  the  voice  they  shall  have  in  making  dis- 
•iplinarv  ndes  and  punishing  infractions  of  such  rules — tliese  are 
questions  that  present  controversial  issues  which  can  not  be  settled 
by  aiiy  technical  ex}>ert.  They  are  matters  which  require  demo- 
cratic decisions  and  aliout  which  a  wide  diversity  of  opinion  will  be 
permitted  in  any  democratic  system  of  industry. 

£mplo3rment  problems  one  phase  of  personal  relations. — The 
personal  illations  in  industry  divide  themselves  further  into  two  sets 
of  probhMiis,  First,  the  employment  problems;  secondly,  the  service 
problems.  The  employment  problems  require  an  administrative  or- 
ganization— commonly  called  a  centraliijed  employment  depart- 
ment— for  properly  recruiting  the  work  force,  selecting  and  placing 
the  workers,  intelligently  training  them  and  educating  them  in  their 
work,  and  {)roviding  an  adequate  system  of  promotion  and  transfer 
t«t,give  advancement  to  the  ambitious  and  the  capable,  to  make  re- 
adjustments for  those  unsuited  to  certain  work  or  to  certain  foreman, 
and  to  provide  steady  employment  when  the  amount  of  work  in  dif- 
ferent departments  of  the  plant  fluctuates. 

Service  problems  another  phase  of  personal  relations. — The  service 
problems  arc  somwhat  different  from  these.  They  arise  from  the 
mere  fact  that  a  large  number  of  human  beings  are  congregated  under 
one  roof  and  the  management  must  provide  a  service  organization  to 
meet  the  human  neoxh  that  develop  under  such  circumstances. 
Health  problems  arise,  sanitation  and  medical  care  is  needed.  Safety 
must  be  looked  after  and  comixjnsation  for  accidents  provided.  Then 
there  is  the  education  and  pix)tection  of  the  foreigner,  the  illiterate, 
and*  the  juvenile  employees;  providing  eating,  rest,  and  recreation 
facilities,  insurance  and  pensions,  maintaining  and  building  up  morale. 
While  the  service  and  employment  problems  differ  somewhat  in 
nature,  they  are  alike  in  that  they  do  not  present  essentially  contro- 
versial questions.  They  are  two  phases  of  the  personal  relations  in 
industry;  both  are  personnel  management  problems  rather  than  eco- 
nomic problems  of  democracy  or  government. 


10      MANAGEMENT,  REPRESENTATION,  AND  INDUSTRIAL  DEMOCRACY, 

Personnel  management  required  under  any  system  of  industry.- 
Wiether  we  have  a  system  of  privately  owned  industry  or  Govern- 
ment ownership,  or  socialism  or  bolshevism,  these  problems  remain 
the  same.     How  to  manage  the  working  force  with  due  regard  to  the 
fact  that  It  IS  made  up  of  human  beings  and  not  some  abstract  thing 
called     labor, '  how  to  provide  for  their  human  needs  and  how  to 
use  their  characteristics,  feelings,  instincts,  ideals,  and  ambitions  to 
get  the  greatest  amount  of  production-these  are  problems  that 
confront  not  only  the  private  industrial  manager— Mr.  Burleson  is 
up  agamst  them  too,  and  so  is  Lenin,  the  Bolshevist,  and  Tchaikowsky 
the  moderate  Sociahst.     Democracy  is  not  the  problem  here-the 
problem  is  scientific,   efficient  management.     In  these  matters  of 
purely  personal  relations  final  authority  may  be  safely  lodged  in  the 
hands  of  experts  and  scientists. 

Safety  and  sanitation  technical  problems.-We  have  made  somo 
progress  in  this  direction  in  the  matters  of  safety  and  sanitation 
±.mployers  and  workers  are  generally  agreed  that  every  place  of 
employment  should  be  as  safe  and  sanitary  as  it  is  possible  to  make 
It.  What  constitutes  a  safe  and  healthful  place  of  employment  is  a 
subject  for  the  safety  expert,  the  sanitary  engineer,  and  the  medical 
man  to  decide  after  research  and  investigation  rather  than  for  a 
decision  by  a  democratic  majority.  It  is  easy  to  see  that  safety 
and  health  problems  are  technical  and  not  essentially  controversial 
and  that  the  same  holds  for  the  other  welfare  or  purely  service  prob- 
lems wiU  also  be  admitted.  But  it  is  not  so  obvious  that  the  other 
phase  of  the  personal  relations,  the  employment  problems,  are  also 
technical  and  need  to  be  handled  by  experts  and  scientific  men 

Personnel  management  also  a  technical  problem.— We  have  a 
notion  that  everything  in  the  world  is  natural  except  human  beings 
Ihe  materials  and   the   mechanical  forces  used   in   industry  work 
according  to  their  natural  characteristics  and  the  laws  of  their  beinff 
but  humans,  we  think,  act  any  old  way,  and  if  they  are  employees 
they  ought  to  do  anything  the  employer  expects  of  them.     A  manac^or 
would  never  expect  wood  or  concrete  to  stand  strains  and  do  work  that 
only  steel  can  do.     He  wiU  employ  a  trained  man  who  understands 
these  materials  to  decide  the  different  uses  to  which  they  are  put 
But  while  the  manager  will  say  that  there  are  lots  of  workmen  with 
wooden  heads,  he  seldom  thinks  of  employing  a  trained  man  who 
knows  the  difference  between  wooden-headed  men  and  other  different 
kinds  of  men  to  decide  the  different  uses  to  which  they  shaU  be  put 
Quahties,  characteristics,  and  capacities  of  human  beings  are  subjects 
of  scientific  study  just  as  are  the  quahties  and  characteristics  of 
materials  or  steam  or  electrical  power.     As  we  expect  an  engineer 
to  know  something  about  the  boilers  or  turbines  he  handles,  so  we 
ought  to  expect  the  men  who  want  to  manage  the  human  engines  to 


MANAGEMENT,  REPRESENTATION,  AND  INDUSTRIAL  DEMOCRACY.       11 

know  something  about  the  emotions,  the  intellects,  the  capacities 
and  the  resistance  power  of  human  beings.  Slowly  we  are  beginning 
to  realize  this  and  the  movement  for  expert  employment  managers 
is  the  best  evidence  of  this. 

Democracy  in  industry  not  technical  problem. — But  the  employ- 
ment manager  or  human  engineer  is  a  technical  man  like  the  safety 
expert,  the  medical  man,  or  the  sanitary  engineer.  He  is  not  a 
statesman  or  a  politician  and  it  is  not  his  function  to  deal  with 
questions  of  democratic  control  or  government  of  industry.  More- 
over, the  better  expert  he  is  at  his  employment  work  the  less  qualified 
he  is  likely  to  be  at  the  controversial  questions  that  comprise  the 
second  set  of  labor  relations,  which  we  have  called  the  economic  col- 
lective relations  in  industry.  He  is  fikely  to  try  to  decide  these  by 
absolute  scientific  laws  when  they  are  very  much  a  matter  of 
opinion  and  bargaining  power.     .     . 

Welfare  committees  v.  Representative  organizations.-  Committees 
of  employees  maybe  used  by  the  technical  men  who  handle  the  personal 
relations  in  industry,  but  they  are  not  the  same  kind  of  organizations 
of  employees  that  are  needed  to  deal  with  the  economic  or  govern- 
mental relations.  The  first  can  be  permitted  to  offer  to  the  manage- 
ment only  advice  and  suggestions.  The  second  must  liave  a  veto 
power  on  the  acts  of  the  management  and  will  sooner  or  later  demand 
an  equal  voice  in  determining  wages  and  hours  and  controlling  dis- 
cipline. .  What  we  have  earlier  in  this  paper  called  shop  committees 
proper  are  nothing  more  than  advisory  committees  on  employment 
and  service  problems.  W^elfare  committees  might  be  a  better  name 
for  them.  They  deal  with  personal  problems  only,  with  personal 
management  questions;  yet  either  in  ignorance  or  as  a  subterfuge 
they  are  ^^ommonly  offered  to  employees  as  industrial  democracy. 

Shop  committees  not  necessary  for  good  personnel  management. ■ 

Thin  is,i>laying  with  fire,  or  with  d3namite,  if  you  prefer  that.  Any 
employer  who  is  not  ready  for  collective  bargaining,  who  is  not  look- 
ing toward  turning  over  to  his  employees  50  per  cent  of  his  control 
over  terms  and  conditions  of  emplojanent  had  better  beware  of  shop 
committees.  If  he  desires  merely  to  improve  the  personal  relations 
between  his  management  and  liis  men,  if  he  wants  only  to  be  brought 
into  closer  contact  with  his  employees  for  the  purpose  of  insuring  a 
squai;e  deal  to  them  as  he  sees  it,  if  he  wants  to  sec  that  justice  is  done 
to  every  emi)loyee  as  he  sees  justice,  then  all  he  needs  is  a  good  employ- 
ment  and,  service  organization.  Wliat  he  wants  to  accomplish  can 
best  be  done  by  expert  employment  and  service  managers.  Shop 
committees  are  not  at  all  necessary  and  they  are  likely  to  confuse 
the  managers  with  issues  of  democratic  control  of  industry  while  the 
employees  may  be  misled  into  thinking  they  are  going  to  have  a  real 
voice  in  the  management  and  become  resentful  and  rebellious  when 


12       MANAGEMENT,  REPRESENTATION,  AND  INDUSTRIAL  DEMOCRACY. 

thoy  find  out  the  truth.  If  these  advisory  shop  committees  are  used 
in  personnel  management  work  it  is  very  important  that  most  careful 
exphmations  be  made  to  the  employees  so  that  they  will  not  misunder- 
stand. 

Committees  necessary  only  when  employer  gives  up  exclusive 
control. — It  is  always  dangerous  for  an  emj)loyer  who  wishes  to 
maintain  personal  control  of  his  business  to  use  representative  com- 
mittees, which  are  a  device  of  industrial  democracy.  The  adminis- 
trative machinery  of  such  committees  is  designed  primarily  for  the 
collective  action  required  in  dealing  with  the  economic  or  govern- 
mental relations  in  industry.  Only  when  he  is  ready  to  administer 
justice  to  his  employees  as  they  understand  justice,  only  when  he  is 
ready  to  give  them  a  veto  power  on  his  acts  and  to  insure  them  a 
trial  by  their  peei-s,  a  jury  of  fellow  employees,  should  an  employer 
inaugurate  an  employee-representation  plan.  For  once  he  begins  to 
deal  with  governmental  relations  in  industry  he  must  create  wage- 
iixing  committees  of  employees,  arbitration  boards,  and  impartial 
umpires.  In  a  word,  he  must  be  prepared  to  give  up  his  exclusive 
control  over  wages,  hours,  and  shop  discipline. 

Committees  and  unionism. — Perhaps  you  still  doubt  my  statement 
that  representative  committees  are  essentially  devices  of  unionism 
and  collective  bargaining.  Perhaps  you  think  I  am  not  justified  in 
caUing  the  employee-representation  plans  ''Employers'  Unions."  Let 
me,' therefore,  support  my  statements  with  citations  from  the  expe- 
rience of  England  and  America  with  works  committees. 

Works  committees  grew  out  of  trade-union  practices. — The  United 
States  Shipping  Board  has  published  a  report  of  an  investigation  of 
''Works  Committees  and  Joint  Industrial  Councils"  and  finds  tliat— 

Worlcs  comrnittecs  have  ovolvpd  out  of  certain  shop  practices  and  onjanizations' of 
union  labor.  *  *  *  It  is  evident  that  the  institution  of  shop  or  works  commiUees 
V  ill  be  easiest  where  both  employers  and  workmen  are  already  accustomed  to  (Collec- 
tive action  throutih  trade-union  oreanization.  This  fact  explains  the  coniparatively 
large  number  of  committees  in  Enj^lish  establishments  and  their  paucity  in  American 
indiistrv'.  *  *  *  Jn  England  the  movement  has  developed  <}uite  naturally  upon 
the  basis  of  the  craft  or  shop  stewards  so  that  the  backbone  of  the  committee  system 
there  may  be  said  to  be  an  already  existent  trade  organization.^ 

Whitley  committee  supports  unionism. — The  Whitley  connnittee, 
appointed  in  England  to  report  on  industrial  reconstruction  problems, 
which  has  done  more  to  popularize  shop  committees  than  tuiy  other 
single  cause,  insists  throughout  its  reports  that  works  committees 
should  be  based  wherever  possible  on  union  organization.     It  says; 

Our  proposals  as  a  vhole  assume  the  existence  of  organizations  of  both  employer 
and  employed  and  a  frank  and  full  recognition  of  such  organizations.  Works  commit- 
tees established  otherwise  than  in  accordance  with  these  principles  could  not  be 


»  Works  Committees  and  Joint  Industrial  Councils.    A  report  by  A.  B.  Wolfe,  U.  S.  Shipping  Board, 
Emergency  Fleet  Corporation,  Industrial  Relations. 


MANAGEMENT,  REPRESENTATION,  AND  INDUSTRIAL  DEMO(^RACY.       IS 

fefrarded  as  a  part,  of  the  scheme  we  have  recommended,  and  miji:ht,  indeeds  be  a 
hindrance  to  the  development  of  new  relations  in  industry  to  which  we  look  forward. 
We  think  the  aim  sho\ild  be  the  complete  and  coherent  orfranization  of  the  trade  on 
both  sides,  and  Works  CommitteeB  will  be  of  value  in  so  far  as  they  contribute  to  sucK 
a  result.^ 

Position  of  the  American  Federation  of  Labor. — The  American 
Federation  of  Labor  understands  it  that  way,  too,  for  it  has  ofTicially 
gone  on  record  for  an  arrangement  whereby — 

First,  a  committee  of  the  workers  would  regularly  meet  with  the  shop  management 
to  confer  over  matters  of  production;  and  whereby, 

Second,  such  committee  could  carry,  beyond  the  foreman  and  the  superintendent, 
to  (he  general  manager  or  to  the  president,  any  imi)ortant  grievance  which  the  workers 
may  have  with  reference  to  wages,  hours,  and  conditions.'' 

War  Labor  Board  couples  committees  with  collective  bargaining.— 
And  the  National  War  Labor  Board  which  made  collective  bargaining 
a  basic  principle  of  its  work  coupled  this  principle  with  shop  com- 
mittees in  most  of  its  decisions.  Again  and  again  it  used  the  follow- 
ing: words  in  its  awards: 

As  the  right  of  workers  to  bargain  collectively  through  committees  has  been 
recognized  by  the  l>oanl,  the  company  shall  recognize  and  deal  with  such  committees 
after  they  have  l)een  constituted  by  the  employees  under  the  supervision  of  an  exam- 
inet  of  the  National  War  Labor  Board  and  by  a  method  of  election  prrscribed  by  the 
board. 

An  employer's  experience. — Finally,  we  have  the  opinion  of  the 
vice  president  of  the  American  Rolling  Mill  Co.-,  summarizing  years  of 
experience : 

Where  the  men  arc  organized  I  think  this  plan  can  be  operated  very  successfully, 
but  wh(  re  fhe  men  do  not  belong  to  our  organization  and  are  not  rcv«ponsible  to  an 
or^nization  made  up  of  their  fellow  workmen,  I  doubt  the  success  of  the  committee 
plan  ^.a  regular  policy.' 

fenipioyers*  unions  v.  Organized  labor. — Assuming  that  employers 
an?co^vjin(,*ed  that  organizing  representative  committees  in  their  plants 
means  collective  bargaining  and  unionism,  should  they  try  to  keep 
the  employees  they  organize  into  works  committees  away  from  the 
the  regular  labor  unions  ?  Will  employers'  unions  be  perpetuated  as 
substitutes  for  organized  labor  or  will  these  employers'  unions 
develop  into  bona  fide  labor  organizations^ 

Warning  of  the  Whitley  committee. — On  this  point  let  mc  quote 
tho'Wiiitley  committee  again: 

We  think  it  important  to  state  that  the  success  of  the  works  committee  s  would  be 
verv  seriouslv  int^Tfercd  with  if  the  idea  existed  that  such  committees  were  used, 
or  likely  to  be  us-^d,  by  employers  in  opposition  to  trade-unionism.  It  is  strongly 
felt  that  the  aetting  up  of  works  committees  without  the  cooperation  of  the  ti-ade- 


»  Report  of  an  inquiry  as  to  Works  Oortimfttprs.    Reprinted  by  U.  S.  Shipping  Board,  1919,  p.  16. 
^Thirtj-oiRhth  Annual  Rpport  of  the  Ameriran  Federation  of  Labor,  1918,  p.  85. 
•United  Stales  Shipping  Board  Report,  p.  159. 


14       MANAGEMENT,  REPRESENTATION,  AND  INDUSTRIAL  DEMOCRACY. 

unions  and  the  eirployers'  afsociaticns  in  the  trade  or  l.ranch  of  trade  concerned 
would  stand  in  the  way  of  the  improved  industrial  relationships  which  in  these  reporta 
we  are  endeavoring  to  further. 

In  an  industry  whtro  the  work  people  are  unor?j:anizcd,  or  only  very  partially 
organized,  there  is  a  danger  that  works  committee,?  may  be  us:d,  or  thought  to  be  used, 
in  opposition  to  trade-unionism.  It  is  important  that  such  fears  should  be  guardeei 
against  in  the  initiation  of  any  se-hcme.  We  look  upon  successful  works  committees 
as  the  bre>ad  base  of  the  industrial  stnicture  which  we  have  recommended,  and  aa 
the  means  of  enlisting  the  interest  oi  the  workers  in  the  suceess  both  of  the  industry 
to  which  they  are  attached  and  of  the  workshop  or  factory  where  so  mu<h  of  their 
life  is  spent.  Thes.'  committees  should  not,  in  constitution  or  methcds  of  working 
discourage  trade  organizations. >  ' 

Works  committees  not  substitute  for  unions.— Please  note  the 
insistence  that  the  essential  purpose  of  any  attempt  to  organize  tho 
working  force— namely,  the  improvement  of  relations  between 
employer  and  employee— will  be  defeated  if  works  committees  or 
representation  plans  are  to  be  used  as  a  substitute  for  organized 
labor  or  as  a  means  of  destroying  it.  This  is  the  point  I  wish  to 
emphasize,  in  conclusion,  also.  And  you  will  note  in  all  the  intelli- 
gently prepared  employee-representation  plans  a  clause  to  the  effect 
that  these  plans  shall  not  abridge  or  conflict  with  the  right  of  employe© 
to  belong  to  labor  unions. 

The  labor  organizations  that  make  coUective  agreements  with 
employers  covering  wages,  hours,  and  discipline  are  here  to  stay. 
It  is  their  practices  that  gave  rise  to  shop  committees  and  they  will 
grow  in  power  and  prestige  with  the  extension  of  the  committee 
and  employee  representation  plans.  There  can  not  be  complete 
industrial  democracy  until  bargaining  power  is  equalized  between 
the  management  that  owns  a  thousand  jobs  and  the  man  who  wants 
to  hold  one  of  these.  To  bargain  on  equal  terms  the  thousand  men 
must  act  as  one  in  dealing  with  the  management.  And  there  can  bo 
no  such  unity  until  the  employees  are  organized  independently  of 
the  emplen'cr. 

Summary  and  conclusion. — Let  not  this  statement,  however, 
mislead  you  into  thinking  that  I  am  advocating  trade-unionism  to 
3^ou  or  to  any  employer.  I  am  advocating  only  that  the  employer 
should  know  what  he  is  about  when  he  begins  to  form  oi^ganizations 
of  his  employees.  I  point  out  the  democratic  trend  in  industry  to 
show  you  what  you  are  headed  for  once  you  get  away  from  the  purely 
personnel  management  questions  and  pass  over  into  the  domain  of 
collective  and  democratic  relations  between  employer  and  -employee. 
It  has  been  my  purpose  in  this  paper  to  point  out  that  pei-sonnel 
management,  the  handling  of  the  emplo^Tnent  and  service  problems 
in  a  plant,  however  scientifically  and  efficiently  this  may  be  done, 
can  not  meet  the  demands  of  democracy  in  industrial  relations. 

'Report  of  an  Inquiry  on  Works  Committees,  p.  127. 


MANAGEMENT,  REPRESENTATION,  AND  INDUSTRIAL  DEMOCRACY.       15 

Mere  welfare  committees  attached  to  such  management  is  not  democ- 
racy and  when  an  employer  thinks  or  pretends  that  it  is  he  is  preparing 
trouble  for  himself.  If  he  is  not  ready  to  give  up  personal  control 
of  justice  let  him  })eware  6f  any  employees'  organization.  Once 
he  starts  with  committees  he  is  on  the  road  to  unionism,  and  he  can't 
stop  or  go  back.  Welfare  committees  in  England,  the  Yvliitlcy 
report  shows,  have  pre{)arcd  the  way  for  works  committees  and  a 
strengthened  unionism.  In  this  country  the  employer  wiU  find  that 
our  shop  committees  tend  to  become  employers'  unions,  and  these 
will  develop  into  labor  organizations,  independent  of  the  employer, 
to  complete  the  tiend  toward  industrial  democracy. 


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A  FEDERAL  agency  created  to  deal  with  problems  of  todustrial 
A  hygkne,  acddent  prevention,  and  admimstration  of  the  labor 
forces  in  industry. 

l-UKNISHES  valuable  aid  to  industrjr  by  collecting  and  andyzing 
F  data  on  all  general  elements  that  are  interwoven  mto  mdustna. 
operations.  

A  /lAINTAINS  a  consultant  service  whereby  managers  of  industrial 
M  enltprises  may  secure  expert  advice  on  special  problems 
arising  m  particular  plants. 

TAEVELOPS  methods  of  labor  administration  designed  to  decrease 
D  cost  of  production  and  bring  about  better  mdustnal  relations 
and  coiisequentiy  greater  efficiency. 


END  OF 
TITLE 


